VMware CEO: Focus on the Mission-Critical, Enterprise Valuable

By:
10/20/2015
From the Road

It’s an interesting time to be the CEO of VMware. The company is one of the pioneers of the modern data center, and now, it’s rolling out new offerings around cloud platforms and hybrid networking. At the time of our discussion, rumors were swirling about what would happen to VMware as part of a possible shakeup to the EMC Federation. Now, with Dell acquiring EMC, who has a majority ownership of VMware’s stock, the questions have shifted focus, but still remain: what does this mean for VMware and its customers? Network World Senior Editor Brandon Butler and I sat down with VMware CEO Pat Gelsinger prior to the merger news and ahead of the company’s annual trade show, VMworld 2015, to discuss the company and its position in the market.

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Be Highly Differentiated & Core to the Enterprise
Gelsinger’s view and approach to VMware’s products in the market, especially when discussing the idea of a unified hybrid cloud platform, is not one of comparison to what others are doing, but rather how they are differentiating themselves in a substantial way. When asked what single measurement of success he thinks is most critical, Gelsinger responded, “when you get an enterprise customer using the platform in a differentiated way, you have a customer for life.” Having a complete set of offerings that are current is the basis of the business, but he reiterates that it’s not a question of whether what they are doing is comparable or better to their competitors, “it’s a question of [VMware] doing things that can’t be done by anyone else that are mission-critical, enterprise valuable” and he says the momentum is growing and enterprise use cases are ramping up in “substantive volume.”

Moving the Needle on the Religion of Networking
One of the areas VMware has taken a strong approach and been very vocal about is on the virtual networking front. But getting customers to adopt virtual networking is like a religious conversion in some respects, according to Gelsinger. Making a radical change to how the network is built and architected means that enterprise organizations don’t always make changes there quickly even though the value proposition is huge, but Gelsinger says VMware is “now seeing that acceleration of customer adoption because [they’ve] done that hard work” of presenting customers a “very compelling set of proof points as well as use cases that are dramatic and impactful.” As Gelsinger puts it (and many others likely agree), “the network must operate for business today to operate.”

Strategically Aligned to the Customer
When looking at partnerships between organizations, there are often many views on what makes for the best alliance. VMware continues to be a part of the EMC federation and Gelsinger sees it as bigger is better during a time of industry tumult allowing them to be more strategic as a whole and positioned more powerfully. As companies look to transform their infrastructure and are asking who they can trust to help them navigate that transitionary phase, Gelsinger seeks to answer that with the collective assets of the alliance. Although, he observed, that there won’t be a single winner where competitors entirely lose and the Federation entirely wins. He sees it as a “heterogeneous environment where customers want choice, they want an increasing amount of flexibility but they want to know who they can trust to partner with them for the bulk of that strategic journey.” With the individual elements of the Federation, Gelsinger says it allows them to “be first, best, strategically aligned to take customers on that transformative journey” and know exactly what they’re buying into. VMware is also helped by the fact that in one of the biggest components of their strategy, hybrid cloud, they have 4,000+ partners running their software stack giving them significant geographic reach and the ability to respond at a large scale to customers’ needs. Gelsinger says this differentiation is “powerful” and that they are “just well ahead of anybody else in that domain.”

Of course, the recent news of Dell acquiring EMC raises questions on what the impact will be to VMware. Will they remain independent? Will the company start selling Dell hardware? Gelsinger, in a recent conference call discussing the deal, spoke of the “substantial leverage” the merger will create for companies involved. The news is still fresh and there are many hypotheses on what the ultimate combination will be.

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